When my father had a toothache, he saw a dentist in Boston who recommended a root canal and dental crown costing about $2,000. He decided to wait until he was in India, his native land, for holidays and had the procedure done there for $200.
Extremely satisfied with the service and the price, my mother decided to have her two front teeth replaced, eliminating a wide gap that tarnished her smile, and estimated she had saved $3,000.
According to Deloitte consulting services, 875,000 Americans like my parents were medical tourists in 2010, traveling outside U.S. borders to receive health care, dental work, elective hip replacements, even bypass surgery.
I hadn’t given medical tourism or outsourcing much thought until some months ago, when I was in Bangalore, India, with Devi Shetty, a pediatric cardiothoracic surgeon and founder of a large medical complex.
Shetty told me bypass surgeries cost his patients $2,000 to $5,000, one-tenth of what it would cost in the United States. As a U.S.-educated doctor, I wasn’t sure whether I should feel threatened by or marvel at Shetty’s setup. But I was curious, so I asked him how he was able to realize such savings.
His formula was simple: Focus on the process and on volume. “If you are investing heavily in the process, the product naturally will be good,” he told me. Just as Wal-Mart capitalizes on the power of bulk purchasing, Shetty has applied process and volume principles to his hospitals, using innovation and well-tested surgical techniques developed in the United States.
Experts have identified other factors that make foreign hospitals less expensive: lower labor costs certainly, but also fewer third-party payments, price transparency, limited malpractice liability and fewer regulations.
American health care dollars are bound to be a prime target for providers overseas. But I was worried about the quality of health care in a developing country, where the tap water is unsafe for drinking.
Shetty, 54, wearing a surgical cap and sea-blue scrubs, had me drape on a cotton gown and surgical shoe covers for a tour of his ICU. He told me that the Joint Commission International — a U.S.-based organization that establishes standards for and inspects health care providers — was coming for a review in two weeks.
I asked him a litmus-test question about quality of care delivered to critically ill patients: “What is your ICU nurse-to-patient ratio?”
Without hesitating he said, “One to one.” The same as ours in the United States, I told him. He sent me a note a month after our meeting: “We got JCI with flying colors.” More than 220 medical sites outside the United States are JCI-certified.
I realized that Shetty was providing “value-based care,” not just “quality care.” Value has become the new buzzword in today’s health-care-quality movement. Value is defined as quality divided by cost. Shetty had maintained U.S.-standard quality in his hospital services at a lower cost, thereby delivering better value than American hospitals do.
Though we may be resistant, we need to shift our focus from quality to value. Medicare has already done this by initiating a value-based purchasing program. This means there will be financial incentive for hospitals to provide higher-quality care at lower total cost.
Starting in July, Medicare is computing performance scores that will lead to monetary rewards in October 2012 for hospitals that provide high-quality care. There will also be penalties. Medicare will also be measuring efficiency measures, which is Medicare spending per beneficiary, and again reward high performers.
Unlike software and manufacturing, health care is highly regulated. And it is largely locally based, hence many patients are unlikely to go overseas for their care.
Regardless, medical tourism has gotten my attention, and from it I have learned about the difference between “value” and “quality.” And in the end, it motivates me to provide value-based care that is high-quality health care at the lowest cost.